From: Eleanor Bloxham [ebloxham@thevaluealliance.com]
Sent: Monday, December 22, 2003 3:15 PM
To: rule-comments@sec.gov
Subject: S7-19-03:
Dear Mr. Katz,
I appreciate the opportunity to comment on S7-19-03. I am the President of a
shareholder value and corporate governance advisory firm.
Good corporate governance begins with the selection by investors of a board
of directors - and proper selection and oversight by the board of
management. When investors' ability to make a real choice in selection of
the board is flimsy, corporate governance and corporate performance are
weakened. After a sixty year period of debate, recent scandals demonstrate
the cost to our economy, to taxpayers, to investors, to fellow board
members, and to management teams of lack of shareholder involvement in the
proxy voting process and lack of meaningful choice in director selection.
The time for action is now.
While I believe the proposed rule represents a small step forward in the
meeting of the SEC's obligations towards investors, I would encourage the
SEC to speed up consideration of a process that creates a more positive
approach to shareholder access. In this regard, I believe the trigger events
create an adversarial perspective to what should be a common sense process
to establish effective investor relations that allow investors meaningful
input and choice into the board nominations process, a critical governance
step. I would encourage the SEC to move forward swiftly to make any and all
changes that would open up the process further and encourage positive
ongoing dialogue and communication between investors and companies, and
positive selection alternatives, to replace a "penalty" trigger approach
that as stated in the rule is a representation of investor
"dissatisfaction". Satisfied investors too should also have a choice in
making this critical governance decision: who will oversee the company they
have invested in.
From sixty years ago until today, those who own shares has broadened
dramatically. Similarly, in this world of technology, it is possible to make
available cost effective means to broaden participation and proxy access and
I would like to suggest the SEC consider such approaches.
Today, investors pay for a company proxy that does not provide a meaningful
choice. Ultimately, investors will pay for the costs that are incurred to
make additional choices available on that proxy. By allowing investors to
foot the bill for these changes, these mechanisms could ultimately save
taxpayers millions of dollars (in enforcement costs) by allowing investors
(who will receive the benefits as well as the costs) rather than taxpayers
to pay the tab for better governance and better returns.
The last sixty years has seen organizations become more complex and
increasingly global. With these changes, effective board oversight has not
become an option: more and more companies must rely on meaningful board
oversight for their own economic health. Giving investors a meaningful way
to do their part in the corporate governance equation i.e. in selecting
directors that will serve them and the companies well should be a top
priority for the SEC in the days and months ahead.
Sincerely yours,
Eleanor Bloxham
President, The Value Alliance and Corporate Governance Alliance
phone 614-571-7020 fax 614-891-3578
email ebloxham@thevaluealliance.com